Merchant Finance Ltd v Pacific Rim Wholesale Pte (Fiji) Ltd [2021] FJHC 81; HBC272.2018 (12 February 2021)

IN THE HIGH COURT OF FIJI AT SUVA

CIVIL JURISDICTION

Civil Action No. HBC 272 of 2018

BETWEEN

MERCHANT FINANCE LIMITED a duly licensed financial institution having

its registered office at Level 1, Ra Marama House, 91 Gordon Street, Suva.

PLAINTIFF

AND

PACIFIC RIM WHOLESALE PTE (FIJI) LTD a limited liability company

having its registered office at 20 Bulu Street, Davuilevu, Nasinu.

FIRST DEFENDANT

AND

MOHAMMED RIZWAN of 20 Bulu Street, Davuilevu, Nasinu,

Company Director.

SECOND DEFENDANT

AND

NORMAN CHAN of 64-68 Rodwell Road, Suva,

Company Director.

THIRD DEFENDANT

Counsel : Mr. Pal A. with Ms. Naidu S. for the Plaintiff

Ms. Nettles V. for the 2^nd Defendant

Date of hearing : 20^th January 2021

Date of Judgment : 12^th February 2021

JUDGMENT

[1] The plaintiff filed this writ of summons and the statement of claim seeking the following reliefs against the defendants:

1. Judgment in the sum of FJD63,651.12 (sixty-three thousand, sis hundred and fifty-one dollars and twelve cents);
2. Legal costs on a full Solicitor-Client indemnity basis;

100. Pre-judgment interest at the rate of 10% per annum from 15^th September 2016 to the date of the judgment as per the agreement;

4. Post-judgment interest at the rate of 10% as per the agreement from the date of the judgment to the date of payment; and
5. Such further or other relief as the court may deem just and reasonable.

[2] The court has already entered default judgment against the 1^st and 3^rd defendants.

[3] The 2^nd defendant in his statement of defence states that the outstanding debt is owed by the 1^st defendant and he is not personally liable to settle the loan. He also states that the purported guarantee and indemnity was never executed by him.

[4] The 2^nd defendant states that he paid $12,240.00 which admitted by the plaintiff. The 2^nd defendant states further that the plaintiff seized materials worth $74,000.00 and sold them for $13,000.00 and the 2^nd defendant by way of a counter claim, seeks to recover the balance sum of $61,000.00.

[5] At the pre-trial conference between the plaintiff and the 2^nd defendant the following facts have been admitted:

1. At all material times, Pacific Rim Wholesale Pte (Fiji) Limited, the 1^st defendant was a customer of the plaintiff.
2. Mohammed Rizwhan (2^nd defendant) and Norman Chan (3^rd defendant) are both directors of the 1^st defendant company.
3. The 2^nd defendant was a director of the 1^st defendant at the material times.
4. On 24^th May 2016, the 1^st defendant entered into a loan agreement (Agreement) with the plaintiff for the provision of FJD 70,000.00 (loan).
5. The 2^nd and 3^rd defendants approached the plaintiff at Damodar City Centre for the purpose of acquiring a loan.
6. A Mortgage Debenture was taken as security over the finance and was signed by both Directors.
7. The 1^st defendant breached its obligation breached its obligation under the agreement and defaulted in its repayments to the plaintiff.
8. As part of remedies available to the plaintiff under the loan agreement and the Mortgage Debenture executed by the company, the plaintiff was entitled to demand payment from the 1^st defendant.
9. The plaintiff then issued demands for payment of the loan to the 1^st defendant on 0^th September 2016, and again on 11^th July 2018 to the 1^st and 2^nd defendants.
10. The plaintiff repossessed materials, in particular bales of clothing that were subject to the loan and sold them to recover their loss.
11. The 2^nd defendant made the following payments to the plaintiff:
    1. 29 July 2016 FJD 6,500.00
    2. 15 September 2016 FJD 840.00
    3. 14 October 2016 FJD 900.00
    4. 22 November 2016 FJD 1000.00
    5. 13 December 2016 FJD 1500.00
    6. 28 December 2016 FJD 1500.00

[6] The plaintiff, 1^st witness is Mr. Krishneel Nikshamy Chang, the solicitor who attested the Deed of Guarantee and Indemnity Bond (the Bond) of the 2^nd defendant. When the Bond was shown to him Mr Chang identified his signature and the signature of the 2^nd defendant and said he explained each and every clause of the Bond to the 2^nd defendant before signing it. He also tendered the Guest Signing Book (P2) of the Law Firm which shows that the 2^nd defendant had gone to the office of the solicitor. However, this document shows that the 2^nd defendant has gone to the solicitor’s office on 23^rd May 2016 but the Bond has been executed on 24^th May 2016.

[7] From the evidence of the plaintiff’s own witness a doubt is created in the mind of the court as to whether the Bond was in fact executed at the office of the solicitors or the 2^nd defendant’s signature was obtained at the plaintiff’s office as stated by the 2^nd defendant in his evidence.

[8] When the Bond (P1) was shown to the 2^nd defendant he first denied having signed it but later he admitted signing it and said when he went to the plaintiff’s office some documents were given to him and he signed them but the contents of the documents were not explained to him.

[9] Since the 2^nd defendant admits signing of the Bond the only question for determination here is whether the terms and conditions contained in the Bond were read over and explained to the 2^nd defendant before signing it. The 2^nd defendant does not say that he did not have the opportunity to read the contents of the Bond and on the other hand the last paragraph of the Bond says;

“WE / I HEREBTY ACKNOWLEDGE that we have carefully read and understood the purpose of the within Guarantee and I / we hereby request MFL to make such advances to the within-mentioned Customer ads MFL may from time to time think proper:”

[10] The 2^nd defendant does not say that he was prevented from reading the contents of the Bond or he was compelled to sign it without reading its contents. He should have read the Bond and if he could not understand any of the condition he could always have obtained legal advice. Therefore, even if the contents of the Bond were not explained to him, it could not be a ground for the plaintiff to avoid his liability towards the plaintiff.

[11] Although the defendant claimed $61,000.00 being balance amount due for the goods seized by the plaintiff and sold for $13,000.00, he did not adduce any evidence in that regard.

[12] In this matter, as I have mentioned above, default judgment has been entered against the 1^st and the 3^rd defendants granting the reliefs as prayed for in the statement of claim. The 2^nd defendant has not shown any ground for this court to deviate from the reliefs granted in the default judgment.

[13] For the reasons set out above the makes the following orders.

ORDERS

1. The 2^nd defendant is ordered to pay FJD63,651.12 (sixty-three thousand, sis hundred and fifty-one dollars and twelve cents).
2. Legal costs on a full Solicitor-Client indemnity basis.
3. Pre-judgment interest at the rate of 10% per annum from 15^th September 2016 to the date of the judgment as per the agreement.
4. Post-judgment interest at the rate of 10% as per the agreement from the date of the judgment to the date of payment.
   

Lyone Seneviratne

JUDGE

12^th February 2021